I've pretty much decided on a Nikon Coolpix 3100 (first timer, looks like best bet for a rubbish photographer like me). I can buy from reputable retailer for approx GBP150, but have seen same on ebay for GBP125. Both prices inc taxes. Is GBP25 worth the risk?

As far as Nikon factory refurbished cameras, Nikon does a very good job with them in the U.S.

I once bought a camera this way directly from Nikon. It arrived in perfect condition in every way (camera,manuals, packaging, etc.).

As for the U.K., I don't know.

One thing to consider is that refurbished cameras typically only have a 90 day warranty. Whereas new cameras usually have a one year warranty (at least in the U.S.). Although, to be frank, I think most failures occur very early in a product's lifecycle anyway.

Looking at Ebay in the U.K., I do see some Nikon Coolpix 3100 listings for as little as £99.99 "buy it now" price for a refurbished model like this one (listed as having a 90 day warranty):

I see some that are not marked as refurbished with the listing showing that they have a one year warranty for £125.00 (this vendor has 3 at this price right this minute). Of course, they could be display models that have never been sold before. So, you may want to ask the vendor questions about them.

I'd do your homework -- carefully checking a vendors reputation by reading customer feedback. Then, ask questions about the camera being sold (is it brand new in the box, is it still in perfect condition, is it a model intended for sale in your location, etc.). Sometimes Nikon won't service a "gray market" product (one intended for sale in another country).

PS Having followed your recommendations and checked out vendors, I see some feedback where people have been charged so much in customs/VAT and shipping (beyond vendor's control) that it negates the saving. Something to watch out for if any other Uk buyers are reading this.